A few thoughts from John Fleck, a writer of journalism and other things, living in New Mexico

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The Strange Case of Joe Romm

I know Joe Romm is a smart guy. I’ve read lots of his work, and interviewed him for newspaper stories. I am sure he must have useful things to add to the climate change-energy policy discussion. He’s aparently an important guy in this arena, because he gets quoted on Andy Revkin’s blog and stuff.

But he has chosen to adopt a style of argumentation that absolutely loses me. I can no longer be bothered to make my way through the tribal argumentation (wherein one tars those one disagrees with with broad brushes and labels) to get to the meat of what he is saying.

Today’s case in point is his latest screed defending his position that “economists don’t understand climate science.” The fallacy of his argument should be immediately apparent. He offers a single economist, and argues from that single particular to an overheated general. That there are economists who do understand climate science, and who have done a useful job of incorporating economic knowledge into the tool kit to be used for dealing with it, should be obvious to anyone who’s followed the climate policy debate. The important thing here is to talk about what economists are and are not saying, not to just dismiss the whole lot of them based on the subset you disagree with.

I could just as easily make an identical argument, citing Romm’s most recent screed, that advocates for action on climate change do not understand what economists have to offer. But that would be obviously fallacious too. It’s just Romm that doesn’t understand it.

23 Comments

I am hoping, after the yelling subsides, that the two sides will start to listen to each other.

I read two economics position papers recently. One on benzene levels in the Houston area made a nice list of the effects that they ignored in coming to their conclusions. Unfortunately, the scientific and practical effects that they ignored are the same effects that would change their conclusions and make their study have little impact. The second article, by Weitzman on climate change, was really detailed and interesting; but he chose to set the effect of new technology to ‘No effect.” If he had included new techonlogy, even conservatively; his conclusions would have been radically different.

On the other side, I agree with John. There are far too many ‘go for green’ articles that ignore the economics of their arguments entirely. The standard hypothesis of these arguments is that raising the cost of electricity in order to make electricity more ‘green’ will have no effect on people’s spending, poverty, or job loss.

On the whole, economists who get involved in climate change seem to have something in common with those superannuated physicists who decide that a few weeks of work is sufficient to overturn the whole of climate physics. Mendelsohn appears to be a good example of this syndrome.

Certainly there are exceptions to the rule, but I can’t blame Joe for his jaundiced attitude.

Michael Tobis has been thinking about this general issue for years, and has several recent posts on the subject. In one of them he linked to this interesting essay. My thought after reading it is that most economists who deal with climate change issues seem to be focused on finding rationales for making the long-lag problem evaporate.

Just now I’m a little more prone to share Joe’s jaundiced attitude since I’ve been reading up on MIS-11 sea level rise (+20 meters in the interglacial 400 kya), although plenty of other climate disruption topics are similarly “inspiring.”

On the irony front, it was instructive to see Joe’s spasm of quasi-denial when faced with Hansen’s proposal of a 350 ppm limit. We are none of us perfect.

Climate disruption is sufficient cause for an immediate crash program to get off fossil fuels.

If you don’t like that, impending peak oil and uncertainty about coal supplies are sufficient cause for an immediate crash program to get off fossil fuels.

And if you don’t like that, eliminating dependence on unreliable imports is sufficient cause for an immediate crash program to get off liquid and gas fossil fuels.

My impression is that the economics profession taken as a whole plays much the same role with the latter two as it does with the first.

For an analog, all we need to do is look at the number of economists who expressed concerns about an impending financial crash along the liners of the one we’re experiencing now. Not many, even though it was a very short-run long-run problem rather than a long-lag problem.

Water in the western U.S. is another fine example, although in that case we’re seeing an increasing tendency to admit the basic problem combined with an utter failure to face up to its magnitude (in terms of proposed solutions).

Your critique of economists’ failure to predict our current economic problems rather reminds me of the critique of climate scientists who can’t even tell me whether it’s going to rain next weekend. Or, with more nuance, climate scientists who failed to predict the current slowdown in warming. In both cases, the response is the same: a proper understanding of both the climate and the economy includes a recognition of the limits of predictability. That makes neither climate science nor economics useless.

In my Macro, micro, and ag econ classes, I just kind of went thru the motions, as their work didn’t really do that much for me, as the hard sciences had better results. As a grad, I took an urban econ and took my natural science attitude in there, namely: look at these low r^2 and Ts. These results are really low, why should I look at them. Anyway, I had a really big name for urban econ, and not only was his name big, his explanatory power was big too.

Econ, simply, is a way of knowing. The low r^2 simply tell us that the results explain a little of the variance, not much. After all, look at the diversity of people out there (within boundaries).

Our task is not to fetishize econ, nor to dismiss it. Rather, it is to put it in its proper context: it tells us a little.

But why Joe wants to pee in a well he may have to drink out of is beyond me.

John, IMHO there’s a flaw in that logic. Illustrative of the problem with economists is that they devoted so much energy to “proving” that the now-former wonderfullness could just go on and on. See Krugman and Quiggin for numerous examples of this (in particular the efficient markets hypothesis and the “great leveling”). I don’t think climate scientists can be accused of anything similar.

Re the present slowdown, the modelers made it clear that while they couldn’t predict the timing of such events (although recall that one group did at least get the start of this one right), the models all show that such events must occur. We’d all be a lot better off if economists had engaged in parallel thinking.

I don’t know whether this viewpoint would be useful in climate change economics, but, when I discuss various science questions–from astrophysics to drug discovery, I now frame the discussion in terms of a set of nested hypotheses about the data. Some hypotheses, equivalent to “Is there global warming?”, have posterior odds of 100 to 1. Other hypotheses, such as “Will it rain on my house later today?”, have posterior odds of .5 to 1.

In this way each hypothesis, strong ones and weak ones, are associated with their own posterior odds of being true and with their own errors in these odds.

Posterior odds, in Bayesian analysis, are the quantitative measure for answering questions whose general form is, “I think that event X has odds Y of occurring, but I don’t have any real data. Now that I have real data, what is the best estimate of the odds of event X occurring?” These odds, with the modifying effect of data, are the posterior odds. The modifying effect of data is captured in a mathematical form, the Likelihood function.

Would nested sets of hypotheses and associated Likelihood functions and posterior odds be helpful in the climate change economics discussion?

For me, the nested hypotheses approach separates a number of factors that are inadvertently commingled in other approaches.

Both Romm and Tim Lambert of Deltoid appear to believe their “investigative” skills are much better than reality. Below is a response I wrote to a blogger who copy and pasted error filled attacks from Romm and Lambert.

Excerpt: Second, you imply that the Senate’s 650 plus scientist report featured a solar study that the uthors of the study objected to. ou even link to comical Joe “global warming may cause bridge collapses” Romm of Climate Progress (See: http://newsbusters.org/blogs/noel-sheppard/2007/08/07/ex-clintonofficial- id-global-warming-contribute-mn-bridge-collapse ) to further explain how our Senate report was in error about the solar study. Romm made so many errors in his piece, it is
hardly worth responding. But, just to be clear, this solar study and the author Romm is communicating with was not and is not in any way part of the 650 dissenting scientist report. It was simply part of our routine news round up of articles in a blog post.
Romm also mistakenly tried to say our EPW website wrote the analysis of the solar study. In fact, our Senate website only reprinted an excerpt of physicist Dr. Lubos Motl’s long analysis of the solar study. Romm apparently did not notice the weblink to Motl, nor the word […] Repeating, contrary to Romm’s assertions, our EPW news roundup did include the author’s conclusion about their study’s findings on the impact of the sun.

John, you used a faulty counter-point to Steve Bloom’s comment when you said:

[Your critique of economists’ failure to predict our current economic problems rather reminds me of the critique of climate scientists who can’t even tell me whether it’s going to rain next weekend. Or, with more nuance, climate scientists who failed to predict the current slowdown in warming].

Climate scientists do not delve into weather forecasting; meteorologists volunteer for that task.

And, it was the 1998 El Nino that generate a high temperature anomoly which was followed by a weak La Nina which brought the global temperature down a bit. That is not an event worthy of predicting “the current slowdown in warming”

So, your opinions are your own but not based upon a solid grounding in climate science.

That discipline comes with many years of intensive graduate program study and years of research and writing in peer reviewed journals.

Mendelsohn is not a climate scientist and likely could never achieve that title at his current station in life.

That said, we can judge his opinions as those of a speculator having no professional background on which to base those opinions.

Cae in point: he said:

[“With agriculture we think that’s going to be a big benefit for Canada,” Mendelsohn says …

Some high-value crops, like corn and soybeans, that can mainly be grown in the U.S., will be grown more commonly in Canada, Mendelsohn says.

“The more the temperature rises, the bigger the benefits will be (for agriculture). As far as Canada is concerned, over the next century whether it’s a two-degree rise or a five-degree rise, it’s probably going to be beneficial.”]

Note he said “we think”. He does not know and has absolutely no reference to poiint to in any respected journal to back up his thinking.

The IPCC has pegged a 2 degree C global temperature rise as the threshhold to an entirely new global climate regime but Mendelsohn is satisfied with a 2 to 5 degree rise.

The Arctic ice cap is predicted to be completely melted during the summer sometime between 2013 and 2020. Mendelsohn does not have any information about the impact on Canada’s summer temp and precip when there is no summer ice in the Arctic. No one does. Yet.

Mendelsohn is playing with the climate change issue as if he had something valid to offer.

He should stick with his “science” and not try to play “climate scientist.” I doubt any economist can win a climate science argument with a climate scientist because they do not k now the climate science well enough to publish their opinions in a science journal.

Eric Fairfield, yes, some people, myself included, agree with your approach, i.e., the crucial necessity of a Bayesian analysis and of data-driven refinement of the model. I am not sure if any of them are certified economists.

John F., my personal gripe with Joe Romm is that he didn’t bother mentioning my writing in this field. I think I’ve been writing interesting enough stuff long enough on close enough turf that Joe is aware of me. Others mention me frequently on his blog, yet I get no mention at all. I’m starting to feel a tiny bit ripped off here.

Nevertheless I’m going to defend him.

That he has found an economist worth criticizing does not constitute more than a single data point around the idea that (most or nearly all of) economics is not useful in this problem.

John, you claim “That there are economists who do understand climate science, and who have done a useful job of incorporating economic knowledge into the tool kit to be used for dealing with it, should be obvious to anyone who’s followed the climate policy debate.” I suppose that is likely, but it is far from obvious to me.

Could you be specific? Otherwise the score around here remains one data point to none in Joe’s favor.

Romm explicitly allows Stern into the exceptional category, so he agrees with you that there are some economists who understand. I personally find Stern singularly unconvincing, though he struggles mightily to stay within economic convention and nevertheless reach a reasonable conclusion. So I am more guilty of the proposed fallacy than Romm is.

I am very interested in knowing whom these economists are “who have done a useful job of incorporating economic knowledge into the tool kit to be used for dealing with [climate change]”, never mind obviously so.

There are interesting discussions around smart places about reinventing economics; here, here, here, and if you count my own humble efforts, here. Those of us who think it needs to be reinvented believe it has very little in its repertoire that is useful for the present problem.

Conventional economics has its place, but most of its theory is based on near-equilibrium conditions, and that is why doesn’t yield useful results for large perturbations. It’s essentially a tangent linear model of a deeply nonlinear system.

On long time scales it seems to offer no insights worth bothering about. This applies to left wing theory, right wing theory and moderate theory equally. I really think we need to start over, though I’m open to seeing any evidence to the contrary. Some of the resource-based stuff needs to be in there, and while those contributions are worthwhile (whether you consider them “economics” or not) that isn’t enough to create a sensible, quantitatively sound, resource-aware policy that preserves prosperity, creativity and freedom into the distant future.

Also interesting to me is that, in my biologist hat, I deal with non-equilibrium systems constantly (often far from equilibrium but sometimes near to steady state). I had not thought about economics prediction in this light. Maybe I should be thinking more about non-equilibrium versions of economics.

It’s a bit of a fallacy, it seems to me, to define away the problem by dismissing resource economists as not economists. Their contributions are critical to understanding the supply side of the carbon equations. I’m thinking especially of Kaufman and Cleveland here, but that literature is huge.

Stern and Weitzman have made useful contributions, it seems to me, as has Herman Daly. Nordhaus.

The enormous body of literature aimed at pricing externalities, Dieter Helm’s analysis of the failures of the European cap-and-trade system was incredibly useful to me. Microecomics has an enormous amount to say that is useful in designing policy instruments in order to achieve the goals on which you and I agree. Huge body of work by the RFF guys there.

But what you’re saying here, Michael, isn’t that you think based on the Mendelsohn example that economists don’t understand climate science. You’re arguing that economists don’t understand economics, which is a rather broader assertion than Romm’s.

Neither of us have ever said “no economist has ever made a useful contribution” the way one might reasonably say the same about astrologers or homeopaths.

I don’t think Joe said that showing nonsense from one economist constitutes a proof of such a proposition, because he explicitly states that he doesn’t believe that proposition. Nor do I.

Check Eli’s blog about the Wietzman thing; I have been saying what Weitzman says for over a decade. The main reason I didn’t publish is because I thought it was obvious.

Sorry if I’m a bit abrasive about this. I’m usually anything but a hog for credit but I’m beginning to realize I need to assert myself once in a while, so I may not do it very gracefully.

I don’t know Kaufman, Cleveland or Helm; references would be much appreciated.

Your final observation, that I’m “arguing that economists don’t understand economics, which is a rather broader assertion” is amusing and almost true.

That is actually a bit strong, but I’ll admit to 1) “economists don’t understand the limitations of economics” and 2) “climate change is a problem that is outside the realm of applicability of most existing economic theory” and consequently 3) “economics as typically applied to climate change is cargo cultism, not rational thought”.

All quantitative theory in climatology is based on approximations, and the question of when various approximations hold is crucial and pervasive. (Typical example here.) Economics is also based on approximations, but it seems to me there is a peculiar pervasive belief that they are universal approximations.

Because economics is outside the fabric of science, mistakes persist there that would long ago have been eliminated in other quantitative disciplines which interact more closely with one another. This idea that there is a single succinct, useful theory that covers all cases is one of the crucial bugs.

So it works sometimes and sometimes it doesn’t, but the response is to find the theory which works always (or to ignore the data altogether) rather than to define the circumstances where it works and then try to come up with a different models for other regimes.

Yet more economics today on Climate Progress. Paraphrasing a key point in the criticized study: “Leaving aside all the factors that will affect them negatively, we find that rich countries will be unaffected by likely future climate disruption.” I kid not.

John, I feel that you just ignored my most recent points, but I’ll leave it at that since Michael is saying that and more much better than I could.

To follow up a bit on what Michael says. Economists are trying to set themselves up as arbitors in an area that they don’t have sufficient understanding of. In the wider world they, the royal they, not all but enough to be annoying, they want to play king of the world, decider of all they survey.

John Whitehead is an exemplary example of this hubris. His game is to try and act out the freakonomics thing, but his analysis is shallow (shallow enough that Eli can drive a carrot truck through large parts of it) and surface level.

Romm has been working the problem long enough that he has no patience with clowns. The kami-kazi nature of modern media, where you no sooner slay an idiocy, than another idiot posts with the same idiocy leads to some shortness of temper.

[Our main results show large, negative effects of higher temperatures on growth, but only in poor countries. In poorer countries, we estimate that a 1?C rise in temperature in a given year reduced economic growth in that year by about 1.1 percentage points. In rich countries, changes in temperature had no discernable effect on growth. Changes in precipitation had no substantial effects on growth in either poor or rich countries. We find broadly consistent results across a wide range of alternative specifications.]

The conclusion included the following with a key footnote:

[Moreover, if rich countries continue to grow at historical rates, their share of world GDP becomes more pronounced by 2099, so even a total collapse of output in poor countries has a relatively small impact on total world output.34 ]

Footnote 34 reads as follows:

[34 Note that the rapid growth of India and China suggest that they will quickly cross the ‘rich country’ threshold, and therefore in the projections they are not assigned significant negative consequences of climate change. ]

The primary authors (apparently all economists) have written off the IPCC projections of Northwestern and Southwestern US diminished snowfall and early melt; loss of Arctic isummer ice; meltback of Himalayan glaciers (each to some degree being observed currently) are not important enough to be assigned significant negative consequences to the econoimc growth of the US, China and India.

Another example of published research outside the authors’ realm of expertise.

The real danger, as I see it, is economic judgements such as this and Mendelsohn’s diminish the prospect of economic impact of climate change on the very nations that must mitigate their climate-forcing gaseous emissions rapidly.

Problem: “actual knowledge” is legally defined. You can damned well know something as a corporate director and yet not have actual knowlege of it.

And if your employees and consultants do their job right you will never, ever have such knowledge. Things like how long CO2 stays in the air — the official PR line for corporate consumption is 30 to 100 years.

Same for economists, who are like board members for the whole economy. Their responsibility is to the economy, not to the facts that tell us it’s going to eat the Earth and die of it.

It’s silly to try to ‘convince’ the actual human beings otherwise. Most of them know because their gradeschool kids told them.

But that’s when they’re at home.

Behind their desk, their official consultant reports emphasize the uncertainty and focus on the short term.
And while in that chair, that’s all they have actual knowledge of.

Remember, this is how the credit derivative problem happened. All the people in the back office knew the problem. So did most of the front office and boardroom people.

scienceblogs.com/goodmath/2008/09/economic_disasters_and_stupid.php

But none of them had actual knowledge for which they were responsible to act — and with business as it is structured none of them had any responsibility to act beyond their own company’s small contribution.

If one little company produces X amount of CO2 and it’s all gone in 30 years, “What Me Worry?” is the — how do we say it — stance taken by the businessperson-shaped shell in which the human being occasionally functions.

Then they go home and tell their family it’s a hell of a world.

Those of us working clerical jobs in the back office say the same thing, and try to urge the big rich white guys to think a little more.

“Work as if you lived in the early days of a better nation.”—Alasdair Gray.

“If these are the early days of a better nation, there must be hope, and a hope of peace is as good as any, and far better than a hollow hoarding greed or the dry lies of an aweless god.”—Graydon Saunders